CRUDE OIL HITS 10-MONTH HIGH: Here's what you need to know

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Stocks ended the day mixed in a quiet day for markets and the economy as the Dow briefly moved back above the 18,000 level and the S&P 500 inched closer to its all-time high.

Crude oil also settled above $50 a barrel for the first time since July 2015.

Scoreboard

Dow: 17,938.3, +18, (+01%)

S&P 500: 2,112.1, +2.7, (+0.1%)

Nasdaq: 4,961.8, -7, (-0.1%)

WTI crude oil: $50.50, +1.6%

10-year Treasury: 1.71%

US Economy

It's a quiet week for the US economy, though on Tuesday we got two pieces of economic data that are sometimes overlooked but give us key insights into the state of the labor market and the US consumer.

Before the market open, the BLS released its latest quarterly update on worker productivity, which revealed output fell 0.6% in the first quarter of the year, less than previously reported but still in keeping with the flat-to-down trend in productivity seen over the last several years.

The decline in productivity also coincided with an increase in labor costs, pushing worker compensation up to +3.7% year-on-year as unit labor costs rose 3% over that period. Productivity rose just 0.7% year-on-year.

In a note to clients following the report, Stephen Stanley at Amherst Pierpont said compensation rising faster than labor costs "is significant, as any time unit labor costs are rising faster than price inflation, it means that labor markets are exerting upward pressure on inflation." Inflation right now, as measured by the "core" consumer price index, is about 2.2% year-on-year. Measured by "core" PCE, this number is at just 1.6%.

Stanley added that many economists are missing a "vitally important point about wages," writing that as productivity comes down so too must the estimates for sustainable wage growth, meaning compensation rising in excess of 3% annually clearly puts us on the path towards an inflationary labor market situation, particularly in light of the received wisdom that calls 2.5% wage growth "lackluster."

Elsewhere in the US economy, consumer credit balances rose by $13.4 billion in April, less than the $18 billion that was expected and less than half of March's revised $28.3 billion increase.

Valeant

Embattled pharmaceutical company Valeant reported its first quarterly earnings since the departure of Mike Pearson from its CEO role. Pearson was replaced by industry vet Joe Papa joined the company in late April.

Valeant missed on the bottom line and while top-line sales were in-line with expectations, the real disappointment came from the the company's guidance, which for the full-year was cut on both the top and bottom lines. Shares of the company fell nearly 15% on Tuesday.

Writing on Tuesday, Linette Lopez noted that another major, and longer-lasting, problem for the company is the decline in the average sales price of its drugs. Recall that the general strategy for the firm had been to acquire smaller rivals and then raise prices. But this scheme has all sort of unraveled and so here we are with the stock down about 90% in a year.

Some of the companies drugs, even are being sold at a loss right now. Here's Linette:

On the call, Papa and his crew framed this low-ASP problem as totally solvable. On the one hand, they explained that the company is working hard to regain its standing with doctors and payers.

On the other hand, Papa tried to describe negative-ASP incidents as technical glitches.

"We now have the data to look at that, and now we know which patients and issues we can address. We can work more closely with Walgreens to fix it," he said.

Morgan Stanley agreed. Yes, the company needs to know which payers will actually pay for its drugs. But it also has to make its new business model of selling a higher volume of drugs at lower prices actually work.

So, we'll see.

Golf

Golf and business have a lot in common. Or at least, they seem to come in pairs.

For one thing, golf is a great way to share inside information about stocks.

From an investor standpoint, studies have shown that companies helmed by CEOs that golf more do worse than their peers, on average. In the US, at least, we're now firmly into the summer season — don't email me about the solstice — which means not only are people of the belief that Friday's don't count but also think knocking off for some golf is a perfectly good excuse to skip work almost any day.

GolfMatch founder Peter Kratsios told Business Insider there were times he'd be matched with people to golf with who were 30 or 40 years older and with whom he had nothing in common. Now, Kratsios can match with golfers who, like him, are about scratch golfers but also like to gamble and drink while playing.

Last month Bloomberg reported that the SEC was sending officials to hang around some Wall Street bigwigs in Miami.